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Interim Budget 2019 Highlights & Impact on Real Estate

Interim Budget 2019 Highlights & Impact on Real Estate

Union Finance Minister Piyush Goyal presented an Interim Budget for 2019 in Parliament today. A full-fledged budget will be presented after the house reassembles after the general election.

1.) Tax to be levied after 2 years from the date of completion of a project allows developers more time to sell unsold inventory. This is a much required structural reform which will ease the operations of developers and reduce the incidence of the tax.

2.) The Interim Budget continues to push for more affordable homes with an extension of benefits under Sec 80(i)BA for one more year, for all housing projects approved until the end of 2019-2020. This should serve to expand this asset class even further and make it more attractive to more buyers as well as developers.

3.) The TDS threshold on rental income has been raised from Rs. 1.8 lakh to 2.4 lakh. This comes as a big incentive to many who are looking to invest in homes for investment purposes and earn rental income.

4.) Tax on notional rent from second self-occupied property has been waived off. This is a big boost to those who own second homes as well as those who have been seeking to do so. As a result, this will serve to boost demand for second homes as families grow bigger.

5.) Household disposable income has received a boost, thanks to the full tax rebate on individual annual income up to Rs. 5 lakh. Salaried standard deduction has been raised further to Rs. 50,000 from the earlier Rs 40,000. This increased savings is expected to increase confidence to invest in properties.

6.) The benefit of rollover of capital tax gains is propounded to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains of up to Rs 2 crores.

7.) Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments (Of Rs 1.50 lakhs)  in provident funds and prescribed equities or other tax saving options.

8.) No income tax on notional rent on the second self-occupied house

GST has been the biggest Indian tax reform since independence. The government continues to remain focused on simplifying GST. It aims to reduce the tax burden on homebuyers and the GST council will take the necessary steps to do so.




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